Family Farms

HL Deb 03 February 1999 vol 596 cc1579-604

8.38 p.m.

Lord Beaumont of Whitley rose to ask Her Majesty's Government what measures they intend to take to alleviate the economic hardships, both present and forecast, of those involved in family farms.

The noble Lord said: My Lords, in asking Her Majesty's Government what measures they intend to take to alleviate the economic hardships, both present and forecast, of those involved in family farms, I should like to thank all those noble Lords who have indicated, by putting their names down to speak, that they are equally concerned by this question. I thank also those Peers who are not able to attend but who have written to me on the subject, such as the noble Earl, Lord Lytton. I take this opportunity to welcome my noble friend Lady Miller of Chilthorne Domer to her new position, responding for the first time from our Front Bench.

I am the secretary of the All-Party Family Farms Group. I also serve on the executive of the Family Farmers Association. For the purposes of this debate, we are talking about farms of less than 125 acres which make up no less than 66 per cent. of all agricultural holdings in the United Kingdom. It goes without saying that a serious reduction in their number would make an enormous difference to the look and character of the British countryside and to the number of people living there.

These farms and those who work on them are under immediate and drastic threat. All farmers are doing badly and are likely to do worse. Family farms are doing worst of all. When one says "doing badly" it does not sound very terrible. However, we are talking of large numbers of people leaving the land; of mass bankruptcies; and of a rate of suicide well above the national average. I do not wish to become too emotive, although I certainly feel it, but we are talking about the destruction of the "Yeomen of England", a politically incorrect expression which I take these days to include yeowomen and Scotland and Wales.

Such a plight for any industry would demand action by government. The destruction of heavy industry, whether shipbuilding, steelworks or mining, has demanded action, if only of an ambulance nature. But what we are asking for is not ambulance but preventive action. Mr. Oliver Walston, whose father many noble Lords remember as a speaker on agriculture in your Lordships' House, has been asking on television for the past few weeks what it is that makes farming a special case that we should interfere to stop the inexorable laws of classical economics from working. I do not agree with a number of his conclusions or his premises, but they were good programmes. Time after time he met the answer from the people he interviewed that at stake was the whole existence of the countryside as a living, breathing, populated entity.

So my Question, as framed, includes an associated one. What are the Government going to do to save the rural countryside? It may be too late. If the Government act as quickly as possible, they may stem disaster. But they are unlikely to find another generation to take the place of this one without really drastic action. The chronicler par excellence of the small farm between the wars was Adrian Bell whose trilogy, Corduroy, The Cherry Tree and Silver Ley is shortly to be serialised on BBC television. His son, Mr. Martin Bell, did not follow in his footsteps but became a journalist and an MP and is a member of our all-party group. The children of family farms are voting with their feet. If the Government cannot save the countryside perhaps they can at least put together a parachute for retiring farmers. I am reminded of the RSM's despairing shout as the officer cadet marches his troops over the cliff. He said, "Say something, sir, if it is only goodbye".

What has caused this disaster in which we find ourselves? The underlying reasons are low world prices coupled with a world economic system which means that the hungry have not got the money with which to buy food. With most commodities we are inclined to shrug our shoulders and let the iron laws have their way. Even with the misery which it will entail, a government which has very few roots in the countryside might well do the same with agriculture and until very recently that appeared to be what was happening. But with a new Minister of Agriculture there appears to be the dawn of hope.

Addressing the Oxford Farming Conference Mr. Nick Brown said: A more competitive industry does not and should not mean ever-larger and more specialised farms. Although the long-term trend towards larger farm size will continue, there should remain a place for the whole range of farm structures and farm business organisations". That may seem a small candle to light, but, believe me, it is a beacon compared with the black future family farms have been facing. I look forward tonight to some answers as to how it is to be achieved because, on the face of it, it looks impossible. But government must achieve it, not least because the problems for them of neglect of the problem will be horrific. The already high suicide rate will go up; and the countryside will suffer from depopulation, which will increase the problems of rural poverty, rural transport and rural shops apart from the cost of supporting families on social security.

Why are the small farmers the worst hit? It is not because they are inefficient. It is true that by the classical measurements of efficiency per pound invested they are not very efficient. But in terms of efficiency per unit of labour, food produced per acre, the preservation of biodiversity and the welfare of animals, which comes from knowing them all by name, they are immensely efficient.

The fact is that they are the worst hit because the immense cornucopia which comes from the common agricultural policy flows, as we heard on Mr. Walston's programmes, to the big farmers who are often not so much farmers as insurance companies. The belief held by the NFU, and until recently by the British Government, that the future of agriculture is agribusiness, has led to the encouragement of bigger and bigger farms and more and more rural depopulation. That is the way of the future, they say; that is the way of the great food producers such as the US. But it is not. The United States pays lip service to free trade and to the World Trade Organisation, but its behaviour is otherwise. An article in the Farmers Weekly of 9th October revealed that Congress is pumping 9 billion dollars into its farming sector this winter. Why? It is because the US Department of Agriculture has published a report of its National Commission on Small Farms entitled A Time to Act which says that it must. I imagine that MAFF has studied that report in depth. I certainly hope so.

There is not the same electoral power in this country for family farms nor quite the mythical—and by "mythical" I do not mean false—American sentiment stemming from, The bridge where once the embattled farmers stood and fired the shot heard round the world or the log cabin in which Abraham Lincoln was reared. But there is here wide public sentiment and sympathy towards the countryside as bodies like the CPRE and RSPB testify. A British or Royal Commission on small farms might well come to conclusions similar to those of its American colleagues. And we would not necessarily find our European colleagues unsympathetic. France has recently been moving to rescue what remains of its peasant sector. Can noble Lords imagine the problems of enlargement if we are going to insist on driving people off the land?

There is plenty the Government can do. Stop opposing "modulation" for a start. Insist on food security to go on with, and a country's right to ensure its own safety by growing its own food, if necessary, with a subsidy. There was a time, as many Members of your Lordships' House will recall, when that was important here. We should eliminate or at least limit the buying and selling of quotas. Other steps will be found in that admirable document of the Family Farmers Association, A Contract Proposed. Alternatively, I could commend the Liberal Democrats' policy of individual contracts between government and farmers. But what is needed most of all is a change of heart and mind across government, particularly in MAFF. The root of the problem is that the Government are indissolubly wedded to two incompatible beliefs. The first is that they would like—I put it no higher—to preserve the British countryside and to persuade people to go on living there. The second is that they feel that they must not interfere in any respect with the principles of free trade. They cannot continue to hold both these beliefs. There is no doubt which they must choose. Free trade is a political construct. The British countryside is our most precious heritage and family farms are at the heart of it.

This is not a chauvinist demand. I was a member of the British delegation to the International Parliamentary Union Food and Agriculture Organisation conference on How to Feed the World held in Rome recently. It was tremendously well attended by all except the very rich countries. There were only two representatives of the United States present. One was a delegate who came for less than an hour—the time it took him to deliver his speech. The second was a keynote speaker, an economist, who told us that there were no problems and that if there were, big business, science and conventional economics would solve them all. The overwhelming majority of the delegates disagreed.

I made much the same speech as I am making tonight, and I received enormous support in the room and all over the world. There is not a country in the world which does not know the importance of family farms. I ask our Government to make sure that we are not moving suicidally away from that belief and to outline just what they propose to do about it.

8.48 p.m.

Lord Hardy of Wath

My Lords, perhaps I may first commend the noble Lord, Lord Beaumont, for his initiative on securing this debate. I do so partly because I strongly support the Family Farmers Association in which he served, as I did for a very long time the Small Farmers Association. The matters raised by the noble Lordz are both serious and timely. That they are serious is beyond all doubt: that they have been serious for quite some time is also certain. I recall in the last parliament being deeply concerned about farmers and particularly small farmers in my constituency. I made a number of speeches about that to very little effect. I still live within my former constituency and I still know the same farmers. I am aware of the deep anxiety which they feel. For many years politicians across the spectrum were quite happy to encourage people to enter farming. Unless they were among the financially fortunate few, they became small farmers and necessarily they then became livestock producers; and in order to remain livestock producers they had to be very caring of their stock, as the noble Lord, Lord Beaumont, has told us earlier. They had to practise careful husbandry. I know many of them who had to devote enormous labour and dedication and toil to keep their heads above water. Many of them now face a desperate situation and they wonder if they can survive.

As I said, some of the farmers that I know are superb stockmen. For example, there is one friend whom I know very well indeed and if my wife or I go to his farm we know the names of some of his cows. We also know that we would need to have a pocketful of nuts to feed them, because they would come up to be rewarded for the recognition. That man does not know whether he can survive. People like that are desperately needed if the fabric of the British countryside is to be safeguarded.

There is another penalty on size, which I hope the Government will look on with some compassion. That is, that if there is a pursuit of de-intensification then it is possible that many small farmers could be kicked beyond the levels of survivability. But they have to survive. The countryside has to be cared for. It has to be managed. Rural areas have to be serviced; they cannot be left simply as a featureless prairie or for the benefit of weekend residents. There has to be a viable population there.

Of course the continuing agricultural evolution means that we have the capacity to produce more and more food, but we can only do so if we continue to damage the environment and the ecological wealth that is still important in Britain but which has been far too badly damaged in recent years. However, if we are to allow the production of food to continue in ever-increasing—perhaps unnecessary—levels, then we do have to consider whether it is economically sane.

Is it economically sane for four-fifths of the money spent on agricultural subsidy and support to be paid to 20 per cent. of the farmers? That is a very important factor which has to be considered. Is it sane to see the rural areas depopulated and to look at all the damage that has been perpetrated in order to enable a large number of farmers to face ruin, while the very fortunate minority may survive? It is a factor which I hope the Government will take seriously into account.

I would suggest that if we are to see the new responsibility for green issues which the present Government have proclaimed we will have to look at the whole approach to agriculture with very real care. May I illustrate my view in one other way? I have for many years sought to serve the cause of conservation. Seventeen years ago I presented a Bill to Parliament to protect hedgerows. The then government blocked it because, they said, the destruction of hedgerows had virtually come to an end. They maintained that block year after year after year, while thousands of miles of hedgerows were destroyed. They maintained the block and they disregarded the facts which emerged that thousands of miles of hedgerows had been destroyed even though they were legally protected under the Enclosure Acts of pre-1840.

However, they brought in grants to plant new hedgerows; and that was welcome. Nevertheless older hedgerows of ecological importance continued to be destroyed, and then in 1992 they promised to protect hedgerows and in 1993, 1994, 1995 and 1996 they maintained the block on efforts to secure the protection that had been promised. Finally in 1996 we had the hedgerow regulations. I will not labour the point because I hope to introduce a debate into your Lordships' House at some future time when I can talk about some of the absurdities which those regulations contained.

If we are to care for rural Britain, then the small farmer is really at the very frontiers of sanity—and not merely the small farmer in the truly rural areas but those within and upon the fringes of the conurbations. They face enormous challenges and, in particular, they face squalid dumping, nuisance and crime. Their lot is sometimes a desperate one.

I live in Wath-upon-Dearne, which is my birthplace, and a man called Tom Williams lived there for a while before he became a Member of Parliament in 1922. He gave me a lot of good advice when I was a very young man, which was based on the fact that as Minister of Agriculture in the 1945–50 government the enormous challenges which that administration faced did not lead that government to neglect agriculture. It was historic and had historically consequential importance. I accept that the challenges faced by this Government are very considerable, although no more considerable than those which faced the government in 1945. I hope that in the next year or two we shall see the wisdom and the sensitivity which was applied then. The present plight certainly demands it.

8.55 p.m.

Lord Inglewood

My Lords, I shall begin my remarks this evening by thanking the noble Lord, Lord Beaumont, for asking this Question. I must declare an interest, for I am a farmer and a landowner—not, it is true, a small farmer by any definition that can reasonably be used in this context, although in the current economic climate I sometimes wish I was a small farmer because it would mean I would lose money less quickly.

The remarks of the noble Lord, Lord Hardy, made it quite clear that the figures which are available show without any argument the current economic plight of the family farm. I should like to take slight issue with the noble Lord, Lord Beaumont, in his definition because, particularly in upland areas, a farm of, say, 120 to 150 acres on bad land can be as impoverished as any small smallholding on lower ground. It is probably true that in thinking about this issue there are in fact other sectors of the economy which might be comparable. I think, for example, of the corner shop, which faces very similar difficulties in the current world. However, it is particularly important to focus on the family farm because, as has already been said, for many years it has been the central building-block of British agriculture. Small farms matter. After all, they have been the core of rural employment. They have been major contributors to domestic food production, and even in the kind of trading and inter-dependent world in which we now live, that matters a lot to our economy. They have been responsible for the use and management of a very great deal of the surface of our country.

It seems clear that if one looks carefully at agrarian history in England—I would not wish to speak for Scotland, although I am sure the same principles apply there—over the years there has been pressure upon the smaller farming units in the countryside. One has only to go back and look at the history of the enclosure awards to see how the changes affected by that legislation led to the leaving of the land by the smallest proprietors. Throughout the last 200 or 300 years of British history, the family farm has been under pressure, with all the social and other consequences which flow from it. One has only to look at John Clare's eulogy on the Northamptonshire countryside to see how those changes were perceived all those years ago.

It always seems to me a slight paradox that, while farmers pride themselves on being independent, they are in fact part of an industry that may perhaps be more regulated by government than almost any other. If we look at the framework of British agriculture since the war we see quite clearly that this is so. Domestically in the post-war settlement alluded to by the noble Lord, Lord Hardy, in his references to Tom Williams, a strong defined framework by government was put in place, which was superseded by, though in many ways it was essentially similar to, the kind of regime that followed it when we joined the European Community and accepted the provisions of the common agricultural policy under the Treaty of Rome.

What we have heard tonight, and no doubt what we shall hear later this evening, makes it quite clear that it is not working. Many small farmers are working for an amount well below the minimum wage and also no doubt working outside the terms of the working time directive. That cannot be right. We are also seeing a change in the capital structure of farming where, increasingly, outside money is coming in and the traditional family business is being transmuted into something much more akin to traditional capitalism. Against this background, if the family farm is to continue and provide a basis for family businesses in rural Britain—in a Britain where the very nature of the rural economy is changing and will continue to change—we shall have to address this problem most carefully. If we do not do so, it will simply go away because the family farm will have ceased to exist.

There are those who say that diversification provides the answer, but that requires extra capital and, in an era of financial stringency, that is most difficult to achieve. Equally, going back to the 1947 Act, the planning system is based on a policy where the countryside was essentially a single land use area; namely, farming. There are still problems in the way of diversifying farms into other rural businesses. Quite rightly, where diversification is an option, planning authorities insist on expensive materials and their use for obvious environmental reasons, but that simply puts up the cost of diversification. Part-time family farming is sometimes said to be the answer and it can be in many circumstances. However, I am not sure that many traditional farmers are ideally suited to, shall I say, tele-working. Finally, there is the need for training and, if one looks at the colleges around the country, it is encouraging to see an increasing range and availability of appropriate training programmes.

However, perhaps most important of all, agriculture in this country and in the rest of the Community—and, for that matter, across the entire globe—faces serious change as a result of World Trade Organisation talks and, within Europe, the proposed enlargement to the east, together with Agenda 2000. This, understandably, is often seen as a threat but it could be a wonderful opportunity for, as we all know, the CAP is inherently economically inefficient.

I remember my noble friend Lord Plumb saying in the European Parliament that the key to understanding farming policy is to focus on profits not prices. That should be the theme which runs through our negotiators' considerations in these important talks. I hope that the Government will be able to assure us that, in the latter, there will be no tolerance of discrimination against this country which may possibly arise because we are not inside economic and monetary union. It must not be allowed to be a reason why we should be discriminated against in Britain. Equally, modulation will hit even the smallest farms in this country. That is also something that we must not allow. If we look to the future, I believe that farmers and small farmers have an increasingly important multi-functional role in the rural economy. But they cannot play that part if they go bust.

9.2 p.m.

The Lord Bishop of Hereford

My Lords, I should also like to thank the noble Lord, Lord Beaumont of Whitley, for initiating this short but very important debate. Anyone with a salary or a stipend, or even anyone on the dole, can hardly imagine the extreme insecurity of many small farmers today. There is no certainty of income at all for those who are not in dairy farming; and, for them, it is but a small income. Their livestock may be unsaleable, except at derisory prices which simply add to the burden of debt and to the overdraft.

The family farmer who has invested a lifetime of skill and very hard work sees his livelihood melting away and his standard of living and that of his family falling well below the poverty level, let alone the dignity level. It is a truly desperate plight for many small farmers in many parts of Britain. Prices are too low, demand is unpredictable, the supermarkets are powerful and sometimes ruthless, and the public, by and large, indifferent.

Within farming families there are often bitter tensions—the older generation hoping that the farm can continue, the younger generation seeing how bleak the prospects are. In Oxfordshire half of the farmers will be retiring within 10 years. More than half of them see no way in which the farm can be taken on. Farmers who plan to retire cannot afford to do so. They, and sometimes their widows, struggle on, unable to cope properly, especially with the handling of large animals which leads to real problems with animal welfare on top of the social isolation and the deep unhappiness of the farmer or his widow. The debts rise remorselessly. Total income from farming has fallen by 64 per cent. over the past two years. But the burden of bureaucracy and red tape increases, often for good reasons, to levels which small farmers find quite intolerable.

This is not an industry which can be allowed to go to the wall; it is different, as the noble Lord, Lord Beaumont pointed out. It is our primary industry and that on which all life in fact depends. It is not the case that ever-larger holdings are the answer. That is certainly not so if we take seriously the social and environmental characteristics which make the survival of the family farm so important in many parts of Britain.

This problem has been described many times in your Lordships' House and debated on a number of occasions. I believe we all recognise that there are no simple answers. However, I want to suggest that action on three fronts could make a real difference—that is, action by government, by the public and by the farming community itself. First, government must be fully committed to CAP reform which redirects available European money from farmers who do not need it to those whose very survival can be assured only if there is carefully targeted support. We do not want to subsidise more production, nor pay headage payments for livestock, which leads to serious over-stocking and environmental degradation. As one local farmer put it to me, we need headage payments for people; that is to say, people who will manage the land wisely and in the interests of bio-diversity and make that vital contribution to the survival of small rural communities and their fragile infrastructure of schools, shops and small businesses, all of whose livelihoods are closely linked to the fortunes of the farmers.

Restructuring and diversification are happening. Value is being added by enterprising farmers to their primary products. Farmers' incomes are being supplemented by spouses and family members' earnings outside the industry. I believe that 60 per cent. of farmers now depend upon money coming in from outside sources as well as from the direct income of the farm. However, more government help is vital. What has already been given this year is much appreciated, but it is too little to make much difference and not sufficiently targeted towards our smaller family farms.

I should like to renew the plea that I made when I spoke about this topic in the debate on the gracious Speech in your Lordships' House two months ago. I ask for a policy of national modulation within an envelope of money which we and the Government can use to help our own farmers on the scale which is appropriate in this country. Modulation cannot work across the European Union on one basis because farms are so different in different countries. If we are allowed to practise our own form of modulation, I believe that it can really work. That is a matter for government.

Secondly, the public could do much more by learning and caring about our farming community and understanding the crisis which confronts it, by developing an informed taste for local produce, by shopping at local butchers and greengrocers, at pannier markets and farm outlets rather than at supermarkets. A real growth in demand for organic produce would encourage our United Kingdom farmers to expand our present small scale production and eliminate the need to import the 70 per cent. of organic food which at present comes from overseas.

Thirdly, I believe the farming community could take some important steps to develop a more co-operative culture with the kind of machinery rings and retail co-operatives that work well and make good sense in other European countries. We need to see a more generous attitude on the part of the larger farmers and a readiness to accept reductions in their own subventions in order to divert resources to the small family farms. As small farms struggle with complex form-filling and with intractable difficulties of gaining access to social security benefits, such is the unpredictability of farm accounts from year to year that there must be more scope within the farming community for mutual help with these bureaucratic burdens.

Finally, I wish to share briefly with noble Lords the experience of one Herefordshire family farm. The farmer and his wife are immensely hard working, cheerful, skilful and efficient. They have slowly built up their tenanted farm over many years. Not long ago they bought in 12 week-old pigs at £34 each. Suddenly the market crashed and 12 weeks later the fattened pigs were offered at market. The price was £9 each. Fortunately, thanks to the existence of a local abattoir and a friendly butcher, those pigs could be slaughtered and butchered locally, and the pork joints and the sausages sold in the small farm shop. The total return with value added in that way was about £100 per pig, which represented a small profit after rearing and butchering instead of a massive loss.

But not all small farmers live near an abattoir or a friendly butcher, or have their own outlet. We should spare a thought for pig breeders unable to dispose of the litters produced by their 50 or 60 sows and who have to destroy at birth 500 piglets instead of seeing them sold, reared and consumed in preference to imported pork.

The changes of the past two years have been bewildering in their intensity and devastating in their effect. But I believe that wise and concerted action by government, by the public and by farmers themselves can make a difference and change the prospects for family farms for the better. That change is urgently to be desired.

Baroness Amos

My Lords, I interrupt the debate for one moment to remind noble Lords that their allocation is six minutes and if they speak for longer they take time away from other noble Lords.

9.10 p.m.

The Earl of Clanwilliam

My Lords, I must immediately thank the right reverend Prelate the Bishop of Herefordshire for his wonderful speech, and especially for his references to organic farming, which may reduce the length of my speech as I intended to speak on that subject. I am indebted to the noble Lord, Lord Beaumont of Whitley, for this interesting debate and particularly to the Family Farmers' Association which produced the document, A Contract Proposed. I ask the Minister to take immediate account of that document as it is relevant to our discussion today.

Family farmers are the core of the farming community. As the noble Lord, Lord Beaumont, said, they are the yeomen of England. Some two-thirds of the 240,000 agricultural holdings comprise fewer than 125 acres and they employ proportionally more farm workers than the so-called prairie farmers. The effect of the CAP has been intensification; that is, less labour and more chemicals. For instance, the number of full-time males employed has halved since 1979–81. While regular part-time employment has remained steady, overall, 90,000 farm workers have lost their jobs since 1979–81.

There is a vital need to bring more people back on the land, to regenerate village life and to provide more care of the land and the environment. Modern methods developed since the war have made intensification the order of the day. The development of the agri-chemical business has combined with support prices and the development of ever larger machinery to create a culture of large scale production with ever greater yields, ever larger herds, battery chickens in their tens of thousands to a shed, and pigs and calves in pens. Much of the latter practice has been outlawed recently. However, this has created problems for farmers who have to compete against the odds of imported competition.

Meanwhile the market in the UK has itself undergone a radical change. The advent of the supermarket has destroyed the age old market system through which the small and family farmer sold his livestock, not to mention the European Commission which has made regulations that have eliminated many abattoirs upon which the markets depended for survival. That has in turn eliminated the farmers' local market. The right reverend Prelate referred to that. The supermarkets in their need for consistency of supply have contracted the large farmers and overseas producers to supply their needs, leaving the small farmer with nothing but an over supplied local market to service at rock bottom prices. As a consequence, the small farmer has been deprived not only of his market-place but also of a place in the queue to supply the supermarket. That is a double whammy if ever there was one. We can see the consequences. Small farmers are going broke and are unable to meet present or future commitments. The noble Lord, Lord Hardy of Wath, referred to the viable population that is needed in the world of small farmers. That viable population is rapidly disappearing.

There are two major problems with the hill farmer. One is that he cannot afford to retire and the other is that he cannot afford to sell his stock. There is a solution that has been suggested to me to propose for discussion which has, incidentally, already been proposed and discussed in your Lordship's Sub-Committee D. It is that the ministry should buy out the hill farmer's headage payments in advance for five or six years future payments in return for selling his stock and leaving his land fallow. Perhaps he would get four out of five or five out of six. That would provide the farmer with a sum upon which he could retire or start up a business and provide the ministry not only with a breather in the production of unwanted beef or sheep but also with a profit of one year's headage payment as well. It would be particularly useful as a source of providing a new young farmer with the means of a clear start in the future. In particular, there would be an environmental benefit of land being given a breather and prepared, as noble Lords will no doubt expect me to say, for organic production, which I would particularly favour. The sums are variable, but let us assume a farmer with 100 cows and a headage payment of £150 a cow, four years in advance. That would give him £60,000, which I suggest is a considerable inducement that even the Treasury might look upon kindly. I ask the Minister to reconsider this proposal and promote it.

Agenda 2000 needs to address these points—at least our interpretation of it does. We need more extensive farming, particularly an interest in the organic area with increased subventions to encourage and increase some tenfold the organic area under cultivation. Such increased subsidy can come from the reduction in CAP subsidies.

Finally, I wish to quote from my excellent brief: Small and medium sized farms may not be the most cost effective way to produce food, but they are the most cost effective way to run Society".

9.16 p.m.

The Earl of Carlisle

My Lords, it is a pleasure to follow the noble Earl, Lord Clanwilliam. He raised many of the points I had intended to make. I thank my noble friend and kinsman Lord Beaumont of Whitley for introducing this timely and important debate.

I declare a financial interest. I am enormously reluctant to speak in any debate where I have to declare a financial interest lest it be perceived that I am trying to make a personal gain. I am not. I own a hill farm of 420 acres called Triermain near Gilsland in Cumbria. Noble Lords who know their Walter Scott will be aware of the ballad of Triermain. The farm has been worked for the past 50 years by one man, who took over from his father, and his sons. The farm consists of 420 acres with 100 acres of fell. So in acreage it falls into the category of larger family farm mentioned by the noble Lord, Lord Inglewood. It is less favoured land, much of it being marginal.

The farm has been consistently improved. In the past 20 year about £200,000 has been put into it from my earned income, from the rent of the farm, from tenant profits, when there were profits, from government grants, and through loans from the bank. The farmers, the Armstrong family, have obeyed all the regulations and have farmed in line with the policies of successive governments. I mentioned the three generations who have worked the farm. I was there last weekend. I told the family that I hoped that long after I had gone there would be a fourth, fifth and sixth generation. They said that that was unlikely if the situation did not improve.

The Government Chief Whip, the noble Lord, Lord Carter, replying to a debate on agriculture on 9th December 1998, quoted A.G. Street who once observed that for farmers everywhere the most important and urgent question every day was not what the politicians would or would not do for them, but whether it would rain tomorrow. As the noble Lord, Lord Inglewood, who also lives in Cumbria, will know, it has been raining there since September. On top of the BSE problems, which have been compounded by the beef on the bone regulations—my farmers have never had any problems over the years with BSE—and assisted by a very poor harvest, the farmers have had to keep their cattle inside since September. As a result they have had to buy over £5,000 worth of bagged silage. The not over-generous compensation payments per head of cattle—140 calves per year are bred on the farm and 600 sheep—produced a mere £4,000. That highly successful farm could shortly go bankrupt, and it will be on my hands.

What suggestions can I make to improve the situation? First, pray, remove the beef on the bone ban immediately. Secondly, mount a second rescue package, based, as the right reverend Prelate and the noble Earl suggested, on a headage payment. Thirdly, introduce a scheme to give a cash payment to older farmers who retire based on a retirement grant for every year that they have served on the farm. When Her Majesty's forces were cut by a third, officers, NCOs and soldiers were given, as it were, a retirement payment to start afresh elsewhere.

Fourthly, I hope that we shall join the European currency. That will lead to a reduction in the pound. I agree with the right reverend Prelate that livestock farmers should be closing ranks and selling their livestock through the livestock auctions system so that they receive a realistic price for the product.

Of course farmers must diversify. How can that be done? I have five ancient monuments on my hill farm of such rarity that I have to be extremely careful not to damage them in the farming process.

Then there is red tape. I visited some farmers near Allendale called the Gibsons. I asked them, if I were the noble Lord, Lord Hoyle, who is to reply to the debate, what they would expect from me. They told me that they are inundated with forms to fill in. They are often visited at most inconvenient times by over-worked civil servants who are occasionally impatient with them. I ask the various ministries dealing with hill farmers in less favoured areas to be more sensitive and patient with them.

Finally, what can I do? I have refused to reduce the rent as yet—it is a low rent—because I have to maintain and repair the buildings and fencing, and that is expensive. What I have done for my hill farmers is allow them to sign a post-dated cheque. There is an old saying that farmers drink to a bad harvest and a bloody war. At present it is impossible even for them even to do that, because the cup is empty.

9.23 p.m.

Lord Wise

My Lords, I thank the noble Lord, Lord Beaumont of Whitley, for raising this important issue. While allying myself with all the concerns raised by other noble Lords, I wish to take this opportunity to voice some of the concerns that I have regarding the horticultural sector.

Many of these enterprises are family based or led, sometimes specialising in niche crops with a high capital base and risk. Their commitment is equal to that of the more obvious family farm. Let us also bring to mind the social infrastructural benefits that these enterprises bring to local employment. They are generically relatively labour-intensive, often employing many part-time staff working flexible and sometimes anti-social hours, as the demands of multiple retailers for seven-day supplies of fresh produce have removed the traditional Saturday time off. The sector also provides high levels of seasonal employment on a localised scale—for example, hop, top and soft fruit picking.

Let us also remember that horticulture is an unsupported sector in aid terms. Many would argue that should be remedied in the CAP reform measures under consideration, but today's debate is on what government support can be given to the smaller units to maintain their ability to remain competitive against imports from outside and within the European Union. I accept that in certain areas the Government's hands are arguably somewhat tied, but there are examples of where they can act by relieving bureaucratic burdens or not imposing regulatory measures unilaterally.

In a debate last year, initiated by my noble friend Lord Rotherwick, I spoke of the downstream and direct consequences that possible "green taxes" in the shape of a pesticide tax would have on horticultural businesses. Again, I draw the Government's attention to the fact that they will be prejudicing the commercial viability of many horticultural units if they elect to introduce such measures unilaterally. The margins are so thin that this would be the proverbial last straw, so why consider it? The potential job losses in the field and packhouse industries would soon outweigh any exchequer gains.

On a related pesticide issue, I also urge government to consider carefully the results of their regulatory actions. Last summer, they announced a review of all acetylcholine esterase inhibitor pesticides, which tend to be the older insecticides in the OP class. I have no problem in appreciating their thinking behind this initiative—only the timing. The likely end result of this review will be the revocation of approval for use of certain products later this spring. The invidious element for growers is that this will not apply to their overseas and continental competitors.

Regrettably, the horticultural sector is quite dependent on these older products for a variety of technical and commercial reasons. If they are to be removed from the armoury of products available to growers, then surely this must be pan-European at the very least. Why should the beleaguered British grower lead with his chin yet again?

Many of these products are technical linchpins or backstops to certain crops—for example, the loss of malathion would leave the watercress industry with no insecticide measure available—and surely insect-damaged product is just not acceptable to the consumer. This industry could quite easily be lost to overseas—and so wider goes the "food gap" and wider still the balance of payments.

These pesticides are due for EU review, but this process is, I fear, progressing at a lamentable rate, probably due to lack of funding for the programme. Surely the Government would be better placed to be forcing the issue in Brussels rather than embarking on a review programme of their own. I quite agree that these pesticides should be reviewed according to modern day safety criteria, but not at the expense of United Kingdom horticulture.

There is precedent to support my argument. About two years ago the international agrochemical company Bayer withdrew an insecticide called Folimat from the United Kingdom market in a commercial response to a requirement from the United Kingdom review. This requirement will need to be fulfilled when Folimat comes up for EU review. Bayer has stated it will not be supporting the pesticide and will withdraw it from the full EU market at that time, but until then it will continue to market it. Folimat was the sole efficacious product approved for narcissus fly. Now bulb growers in the fens and the south-west have to watch their Dutch competitors enjoy a production advantage not open to them. They are investigating alternatives, but all research costs money, which the industry does not have.

I urge the Government to consider the indirect consequences of their actions more closely and, wherever appropriate, consult bodies like the National Farmers Union on such steps before they act. By so doing they will be less likely to shoot their own industry in the back, especially the smaller enterprises upon which this debate has centred.

9.30 p.m.

The Earl of Shrewsbury

My Lords, the noble Lord, Lord Beaumont of Whitley, deserves both our praise and gratitude for bringing to the notice of the Government the economic hardships faced by traditional farming families in these desperate times for the whole farming community. I must declare an interest as a small farmer who breeds excellent pedigree sheep near the Peak District National Park. I shall be very brief.

It is well known that the farming industry in the United Kingdom is suffering its most difficult times since the depression of the 1930s. Some industry pundits believe the present circumstances to be far worse than that. In the main it is the livestock farmer who has seen the end price of his stock plummet, be that stock for the store market or the butcher. In a nutshell, when I farmed in Shropshire 15 years ago my finished beef cattle regularly made more than they do today, without allowing for inflation. Feed barley off the field was £100 per tonne 15 years ago; today the figure is about £80, without taking inflation into account. In my part of the Peak District, which is a major sheep-producing area, store lambs last autumn made £20 each. Eighteen months ago they fetched over £35 apiece. The market value of my ram lambs has fallen by over £100 per animal on average in the past 15 months, and there is little, if any, sign of improvement

Meanwhile, costs increase and the consumer wants ever-better products and has higher health requirements and standards. I have no problem with the latter. My sheep are monitored from almost a cough or sneeze to an ingrown toenail because I firmly believe that quality pays in the long run and I intend to strive to be the best. Last week's front page in the Farmers Guardian suggested that farm incomes had fallen by over 48 per cent. in the previous 12 months alone. I believe that the figure is considerably larger. In my part of the Midlands the average farm is about 150 acres and very much family farmed, as it has been for generations. The majority of these farms are livestock-based with both husband and wife, and probably one offspring, working on the unit. Very long hours and low incomes are the order of the day—circumstances that would make the average working man or woman in this country very cheesed off with life, and pretty rapidly. However, there is no cause for complaint. People do not go into the farming industry to make vast piles of money or for an easy life. They do it because it is their way of life and a job at which they are expert. Families have been doing it expertly for generations. They are the best and most efficient farmers in Europe. That is a fact of which we should be very proud. But in very many cases the family business provides an income that is well below the average wage of a farm worker, who does not himself make a fortune.

Today it is a tragedy of vast proportions that the rug has been pulled from under the feet of these farming families through a complex and wide variety of causes. The present situation in agriculture drives many farmers to despair and, in increasing numbers, suicide. I believe that last year in Shropshire alone 12 farmers—perhaps the figure is even higher today—took their own lives. Real biting poverty becomes more and more prevalent. Fanning charities are inundated with requests for help from farmers and their families. These people are extremely proud and do not ask for help lightly.

Unless more is done to arrest the situation—it is now a matter of great urgency—in only 10 years from now the country will reap the results and the consumer and the Exchequer will pay dearly. This is not a threat but a promise based on fact. If the current tragedy continues young people will not go into the farming industry. That is happening already. The whole fabric of the countryside community will be damaged irreparably.

I and many in the farming community applaud the Government on the recent announcement of a £120 million package for farmers, and in particular hill farmers, who are very deserving of it. It is just what is needed, but, sadly, it is a mere drop in the ocean.

I appeal to the Government to help the farming community in every way possible to help it to survive and prosper in years to come. That investment will be well rewarded over the longer term. I appeal to the Government to stop the endless migration of young people—the seedcorn of the future—out of the industry; to stop the misery which hardworking farming families are experiencing on a daily basis; and to stop the tragic human cost of the worst depression the farming industry has seen in living memory. Something must be done.

9.35 p.m.

Lord McNair

My Lords, I, too, am grateful to my noble friend for asking this Question. My locus for joining this evening's debate is that for about 11 years my father ran a small market garden. It was not quite a family farm but close enough for me to understand the precariousness of a life in agriculture at the smaller end of the scale. He specialised in early and, for those days in the early 1960s, exotic fruit and vegetables such as melons, green peppers and aubergines. He specialised in flowers too. I remember a very cold night in the early 1960s when the temperature dropped to 1 degree Fahrenheit. That was 31 degrees of frost. The heating in the glasshouse could not cope and he lost a glasshouseful of chrysanthemums. Yes, my Lords; earning a living from the land is a precarious business. I wish today to talk about one way in which the financial effects of these uncertainties could be mitigated.

I am not sure how many noble Lords are aware of this, but my noble friend Lord Beaumont has written a thoughtful and thought-provoking book called The End of the Yellow Brick Road. It is well worth reading, as I am doing at the moment. My noble friend is too modest to blow his own trumpet, but I am sure if any noble Lord asked nicely he would sell him a copy. It is well worth the modest price. The book has a lot to say about the issues that we are discussing tonight.

In that book my noble friend refers to, contemporary suggestions that a Citizens Income should be funded out of a land tax". The idea of a citizen's income is excellent although I would not suggest that it be funded from a land tax. I shall touch briefly on how I believe that it should be funded. But what I really wish to do is to explore the changes that a citizen's income would bring to the way we live.

I know of three ways to achieve that. One is the land tax proposed in the early part of this century by Henry George. Another proposal includes several variations by such people as Bill Jordan of the Citizen's Income Trust, and Hermione Parker. All require careful adaptation and fine tuning of the existing tax mechanisms as well as a significant further amount of redistribution.

My suggestion—I do not wish to labour it; it is my noble friend's debate—is that we adopt the mechanism of the resource economics proposition which is to replace income tax, corporation tax, national insurance contributions and value added tax with one tax on unprocessed energy resources. By doing that we could sweep away a lot of form filling and make our lives much simpler. But not only that, the mechanism of a unified national indirect taxation (UNITAX) enables the Government to pay, on present calculations, a citizen's income of £117 per week per adult—£20 at birth rising by equal amounts to £117 on the citizen's 16th birthday.

Just think what a difference that would make, in particular to the family which farms. I shall not emulate the noble Baroness, Lady Hollis of Heigham, and rattle off detailed figures for many different family circumstances. The figures are simple enough to work out. A family with children of different ages could well find themselves about £400 a week better off. The mathematics of the arrangement are unassailable. It just needs a leap of vision.

A citizen's income would have benefits for other citizens. Three homeless people could pool their resources and rent a flat. Students would have enough to live on while they studied; and 16 and 17 year-olds could afford to stay on at school, help on the family farm, train or even undertake an apprenticeship.

I hope that the Government will look at the various ways in which a citizens' income could be achieved. If we want our farmers to be custodians of the countryside, the development would be made more possible and palatable if my suggestion were adopted.

I have one more suggestion as I see I have another minute. We often run into time difficulties in debates. They might be avoided if the clock started at 1 instead of 0.

9.40 p.m.

The Earl of Stair

My Lords, I begin by declaring an interest. Not only am I involved in my local farming community, but I farm my own farm in a less favoured area in south-west Scotland.

Tonight's Question tabled by the noble Lord, Lord Beaumont, follows previous debates and Questions in this House on agriculture which in the main have addressed the business implications of the current agricultural crisis. This Question relates to an equally important aspect of the impact of the crisis on family farms, in particular in the light of the recent release from the Scottish Office that Scottish agriculture has shown a 45 per cent. decline in profits in the past year.

At a time when we are still waiting for the proposals on Agenda 2000 and related rural development policy to be confirmed, I would like to take this opportunity to remind the House of three brief points which uniquely affect the family farm in comparison with other small businesses. First, in terms of small business, most farms are highly capital-intensive in relation to the number of employees, discounting family labour, and as a result they tend to be asset rich but with a high dependency on the bank. Secondly, the livestock sector in particular is increasingly susceptible to the buying policy of big supermarket chains and abattoirs, which in turn trade on currency fluctuations and do not always buy British. Thirdly, it is about the only industry where the weather affects not only the quality of the end product but also the cost of production.

There is a favourite word often used as the easy escape for family farms in the present crisis. This word is "diversify". And the question which faces families wishing to bring in non-farm related income is: in which direction should they go? Very often niche food products and tourism and leisure are seen to be the best options.

However, with increased requirements in health and hygiene and other regulations, the capital required to diversify into the food industry tends to make it prohibitive. Tourism and leisure are the easiest diversification for a farm business. However, it should also be remembered that tourism in many parts of the country is a very seasonal harvest and many outdoor leisure activities can be influenced by the weather. There is also a limit on how many bed-and-breakfast or similar businesses each region can support without flooding the market.

The present Government are often not perceived as being generally farmer friendly. However, they are very keen to improve access to the countryside for the remainder of the mostly urban-based population. There does not appear to be an appreciation of the part played by the farming community in the maintenance of the countryside; and if the rural economy is allowed to degenerate there will not be the same countryside for people to enjoy.

A recent survey in south-west Scotland revealed that although the majority of current farmers intended to remain in farming and continue with similar enterprises, they intended to cut inputs into new machinery, capital investment and feed and fertiliser. Of the total surveyed, one third intended to cut their own personal drawings from their businesses. This does not suggest a very bright future for Britain's countryside or for the many businesses which rely on a successful agriculture industry.

Under Agenda 2000, subsidy payments in the less favoured areas are likely to be land or quota based rather than headage related. While this will help some fragile environments, the consequent reduction in livestock and output will have a considerable knock-on effect on supporting industries and employment in rural areas.

Following the Agenda 2000 proposals, the current Rural Development Policy Objective 5b status of rural areas is likely to be replaced by a new Objective 2 status. While many rural areas with a population density of fewer than 100 persons per square kilometre will be eligible for Objective 2 status, some areas will miss out under the current proposals because there are not more than twice the EU average of persons employed in agriculture. Though the average farm size in the United Kingdom is considerably larger than in the remainder of the European Union, it does not mean that the requirements and benefits to the rural economy under Objective 2 are any the less.

Finally, can the Minister give an assurance that when Agenda 2000 and the new rural development policy are published the implications of both on British agriculture will be considered separately for their effects on small farms as opposed to the industry as a whole? Also, can the Government endeavour to ensure that as many less favoured area farming communities as possible qualify for new Objective 2 status in order to maintain a sustainable rural economy?

9.45 p.m.

Baroness Miller of Chilthorne Domer

My Lords, first, I thank and congratulate my noble friend Lord Beaumont of Whitley on tabling this Question. He has long been a champion both of a more environmental approach to life generally and of the small farmer. Noble Lords this evening eloquently made the case of what is important about small family farms, both environmentally and in terms of the rural society as a whole.

I should like to share some of the results of a survey commissioned by the National Farmers' Union in the South-West last year. It was one of the largest surveys of its kind ever carried out. It especially addressed two questions: first, how do farmers feel about their future in farming—the threats and opportunities? Secondly, what do farmers need over the next five years to secure their future? The answers show clearly that farmers are more realistic than to expect a large pot of money to bail them out; in fact, they are still willing to take chances, to create business opportunities, to look at off-farm work, at how to add value to their products and to look at more training to cope with all the regulations and red tape already mentioned this evening. But to do that they will need this Government's help. They need a clear message that the Government will commit themselves to some basic measures which are on offer from the European Union. If we take up the offer of a national envelope, it will start to turn the tide in rural areas.

CAP reform and Agenda 2000 for small farmers and the so-called second pillar contain important measures which would address many issues mentioned this evening. Those measures are optional for member states and require substantial co-funding. But they are the key step in achieving the sort of farming methods in rural society and the "living, working countryside" that successive governments have espoused but done little or nothing to create up until this point.

First, the UK needs to subscribe to the scheme of set-up grants for young farmers. After listening to the debate this evening, not many people would encourage their children to go into farming where, certainly in my region last year, 70 per cent. made a loss. We also heard the downside of not much leisure time, few if any holidays and so forth. So young farmers will need encouragement. At the moment in the UK we are very much the exception in not participating in that scheme. It would encourage new entrants from the younger generation into the industry and compensate for those farmers' children who, understandably, choose a different way of life for themselves. New entrants would allow member states to pay a lump sum of £17,500 and an interest rate subsidy on loans. Besides encouraging new entrants into farming, the scheme would stem the flow of small farms being bought up by larger farms. Such a scheme would also help those who cannot even take the first step on the farming ladder by renting a county farm because the set-up costs are too high.

The second measure at which I hope the Government will look addresses the other end of the spectrum. Just as the industry needs younger, energetic entrants, it also needs an early retirement scheme to enable the older farmer to retire. Many tenant farmers, because their house is tied to their job, cannot afford to retire. So far the Government have chosen not to take part in the existing early retirement scheme, but the conditions of the new scheme are less restrictive and the Government should see that as a constructive part of the package. It would also apply to farm workers. Allowing retirement from a physically demanding job for some older people and opening up those opportunities for the young is a more logical step for rural areas than spending large sums of money moving the unemployed youngster to the town under New Deal.

The third measure, as the noble Lord, Lord Inglewood, highlighted, is the need for training. That is crucial. In the National Farmers' Union survey that I mentioned, training opportunities were one of the key conclusions. The more training that farmers received, the more confident they felt about coping with the challenges and threats. Business management becomes even more critical if we are expecting farmers to diversify, take part in local produce schemes, tourism and environmental protection work. There is a deficiency geographically and in terms of curriculum. That certainly needs to be addressed.

Many noble Lords have mentioned the fourth measure which ties in with several concerns. It is a measure that would grant-aid farmers to help them process and market their produce. We have heard a great deal about the supermarket mark-up of produce. The farmer should earn a decent proportion of what the consumer pays for food. Shortening the food chain has many benefits that speak for themselves: fewer food miles, added employment in small-scale rural businesses and filling a public demand for local fresh produce.

Similar measures address forestry and would allow diversification into processing and marketing the timber. That is equally useful for rural areas.

Finally, we cannot regard farmers and their farms in isolation. We need younger generations to want to farm and to succeed. They are often the fixed points in an increasingly mobile rural population. As such, they take a long-term view of their rural communities; for example, in my village chairing the parish council, starting the youth club and running the Sunday school. The relationship is symbiotic. It will be no use bringing in measures to help farmers if the community of which those farmers are a part is on its knees with no school, no transport and no post office. Reform of the CAP and the introduction of rural development plans offer a real chance for a comprehensive approach, if it is done properly. People who work in those communities, within a supportive framework, can look forward to a bright future. Will the Minister say whether the Government mean to adopt the measures that I have outlined as a first step on that road?

9.52 p.m.

Baroness Byford

My Lords, I too thank the noble Lord, Lord Beaumont of Whitley, for making this evening's debate possible. I also want to congratulate the noble Baroness, Lady Miller of Chilthorne Domer, on her first response from the Front Bench. It has been a joy to listen to her. We look forward to debating with her in the future.

I also thank the noble Lord, Lord Hardy of Wath, for his contribution. He is the only Member who has spoken from the Opposition Benches, for which we are sorry, but his contribution, as always, was pertinent and to the point.

We can all agree on one fact: that the farming industry has gone through, and still is going through, a very difficult time. MAFF statistics published on 28th January confirm that situation. They show that in real terms last year farming income fell by 32 per cent. Over the past two years total farming income has fallen by 58 per cent. The situation is dire. The reasons given for that fall include the reduction in commodity prices, economic difficulties in Russia and Asia, high interest rates and the strength of sterling. Whether big family farmer or small, all have had to cope with drastically reduced incomes.

Figures produced by Martin Turner at Exeter University showed that in the South West, to which others have referred, income has fallen heavily. Those on mainly cropping farms have also been hit, with average incomes falling to only £439 per farm.

In Scotland, figures released on 29th January showed that in 1998—also referred to by other noble Lords—output was down by more than 8 per cent. and income from farming at £187 million was about one-third of the level it was two years ago. The Scotsman reported that, every farmer is different, but for a year's work the average farmer in Scotland can expect an income, the difference between what comes in and what goes out, of £416". Incomes of £439 in the South West and £416 in Scotland make chilling reading.

Tonight's debate has covered many issues and, sadly, with the restriction on time, I cannot mention them all, but horticulture, young people, retirement schemes and market gardening are all very important. However, one of the most striking issues is the current plight of many of our farmers who are in dire straits. One organisation, the Royal Agricultural Benevolent Institution, the only national charity in England and Wales devoted to agriculture, has altered its provisions and now gives help to current serving farmers. In March last year the institution put an emergency fund together. It has received more than 300 calls and, as a result, has given £130,000 to 140 currently farming families. This morning the National Trust announced that it has launched a £400,000 package to help tenant farmers hit by the present crisis. That money will help to fund projects, including turning redundant farm buildings into holiday accommodation or light industry. Such financial help is welcome and I do not belittle the measures given, but they do not solve the problem.

Having recently visited farmers in Wales and having spent the past two mornings at the NFU conference here in London, I know that the one thing that all farmers recognise, and for which they are pressing, is a level playing field or common standards between countries. Farmers recognise that customers want high value and good quality food. British farmers can, and do, produce that food. However, they need to be able to compete with their counterparts from other countries, but they must compete within a fair system. British farmers have always been leaders in achieving higher welfare standards, but they must not be penalised in the market place, particularly with imported food from countries where food production is insufficiently regulated. That is where the rub lies and is an aspect that the Government have failed to address.

The noble Lord, Lord Beaumont, referred to the speech made by Nick Brown at the Oxford Conference. I was much encouraged by the speech yesterday by the EU Commissioner, Franz Fischler, who, when referring to animal welfare issues, said in reply to a question that higher welfare standards were required. He indicated that extra payments would be made to farmers who sought to farm to those new standards. Such agreements would be voluntary, but those willing to undertake such work would receive help with the additional costs. Sadly, that will come too late for our pig producers who have already spent thousands uprating their housing systems, whereas producers in other countries do not have to bear such costs. I hope that the Government will take that point on board.

This is the third farming debate in your Lordships' House in the past two months, underlining the great concern felt by those in the industry and by your Lordships who are present tonight. It is surprising and sad that the Minister, the noble Lord, Lord Donoughue, has failed to attend any of the three farming debates and has therefore not had the opportunity to listen at first hand to many of the concerns expressed.

Our farming industry needs to be profitable for, without profit, many of the environmental schemes that we want to see will not be possible. We want to produce good quality food. We want our Government to fight for a fair deal for our farmers. We look forward to the Minister's response.

9.58 p.m.

Lord Hoyle

My Lords, I too must thank and congratulate the noble Lord, Lord Beaumont of Whitley, on tabling this important Unstarred Question. All noble Lords who have spoken have been entirely sympathetic to, and supportive of, small farms and farming. However, before I go any further, I too must welcome to the Liberal Democrat Front Bench the noble Baroness, Lady Miller of Chilthorne Domer. I look forward to hearing from her on many occasions in the future. I am sure that we shall.

I shall deal first with four of the issues that have been raised. The issue of beef on the bone was mentioned. My right honourable friend the Minister will be making an announcement very shortly on that subject. As regards red tape, a great deal has been said about the NFU conference today. The Minister said today, We have been trying to help farmers by reducing and simplifying forms; reducing census and survey demands and providing forms with information already pre-printed on them to save farmers time". He went on to say—and I believe that this will help— We are continually looking for a way to improve how we deal with unavoidable paperwork". I shall also deal with the question of retirement schemes. We are sympathetic to what can be done in that regard. We have to look for a flexible scheme. My right honourable friend has said that he will certainly do that. I share the views expressed in relation to suicide. I assure the House that this matter is taken very seriously by MAFF. We are concerned about the high incidence of suicide. A MAFF official has been seconded for two years to the Rural Stress Information Network. Working on that basis, we shall do all we can to help to alleviate rural stress. I agree with what has been said—that the more we improve the farmers' lot let us hope that we shall also reduce the number of suicides.,

The decline in the total income from farming has been outlined tonight. It amounts to 32 per cent. in real terms. I agree with that. There is also some good news in that there have been four reductions in the base rate since October 1998. They are worth about £700 per full-time holding. There have also been the recent green rate devaluations which will be worth about £100 million to UK farmers in a full year. Finally, although no firm figures are available, we hope that farm rents will fall when they are re-negotiated—to reflect the decrease in incomes. I am putting these forward as factors that could possibly help farmers. We are also expecting the Commission's price fixing proposals in the near future.

We take very seriously not only the debate tonight; we are also listening to the views of farmers. That is what we have been doing with farmers and farmers' representatives across the UK. We shall continue to do so. We have taken a series of steps to help agriculture, both for the present and the future.

My right honourable friend sent a letter to all farmers in the country. I say to the noble Lord, Lord Beaumont, that the Family Farmers' Association attended the associated conference in London. In addition, there are regional visits taking place seeking views on the CAP reform proposals. What is being said by farmers is being taken into account.

We are interested in family farmers and also in small farmers. There is scope for our strong stand opposing the Commission's proposal for mandatory EU-wide ceilings to be misinterpreted as the Government supporting only large farms. That is not true. The reality is that it would discriminate against many ordinary UK fanners as well because, as has been said tonight, our farms are larger and more efficient than most of those in Europe. In addition, any moneys would not be returned to our budget but would go back to the Community.

Noble Lords will also be aware of the measures taken by the Government to ease pressures and to encourage developments such as the aid package of £120 million which we announced on 16th November. It will particularly help many in the hard-pressed livestock sector which has been referred to tonight.

The introduction of the euro has led to major changes in the agri-monetary system—that has been referred to in our debate—which converts payments under the common agricultural policy into national currency. The old system had its adherents, and the green rate freeze has protected farmers' incomes to the tune of around £400 million during the two years it has operated. However, it is now time—and this has obviously been realised tonight—to move nearer to market realities. I believe that the new system which has been negotiated by my right honourable friend achieves that and also provides a smooth transition from the old to the new in the form of compulsory compensation.

I should now like to consider current and future measures to help the farmers we have been talking about tonight. All of us realise what a very difficult year it has been for livestock producers. For beef producers there has been the continuing effect of the structural surplus, as we have heard, together with falling market prices and demand. For sheep producers there have been two consecutive years of delayed finishing and poor market prices. In addition, the strong pound has made beef imports attractive while, on the other side, it has made sheep exports unattractive.

In the beef sector, one of the most important things for this Government to achieve is the lifting of the beef export ban in Europe. I am sure that all your Lordships were delighted to hear, as I was, about the European Union agreement to the Date-Based Export Scheme in November last year. After two-and-a-half years, British beef will soon be back on the world market. We are now putting the Date-Based Export Scheme into place. After the Commission inspection, which we expect to take place in the next couple of months, a date will be set which will enable exports of de-boned beef and beef products to begin. Of course this will be from a small base—

The Earl of Clanwilliam

My Lords, I am very grateful to the noble Lord for giving way. May I ask him to talk not so much about beef exports but to tell us something about the beef to be sold by the small farmer who is unable to find a market for his beef? May I ask what the Government are going to do for these people?

Lord Hoyle

My Lords, by the improvements that we are making we hope to be able to improve the lot of the small farmer. I do agree there is a difficulty, as has been mentioned tonight, about the supermarkets. I can assure the noble Earl that this Government believe in the small farmer and what he is doing in the farm shop. We do believe in beef being sold locally as far as possible, and we shall certainly do everything we can to assist in that direction.

We are trying in relation to Europe to establish the need to reform the common agricultural policy. I believe that that would help the farmers. We have to take it from being based on production alone to looking again, as has been said tonight, at other areas, taking into account the environment as well. I believe that if we can get through what we are trying to achieve it will be very helpful to small farmers and family farmers. We have to get away from what has been the basis of payments in the past: that is in relation to production.

Unfortunately, on sheep reform we were not able to do this, but we are proceeding as far as we can with other matters. It has also to be said that we must be interested as well in the rural community as a whole. I would like to say to your Lordships that we have a vision for the countryside and it is wrong to suggest that we are an urban government. Indeed, we have a long tradition in rural communities as well as in towns. We are well aware of the problems facing the rural areas and of the fact that they need special attention.

In our vision for the countryside we recognise the distinctive features and needs involved, and also the needs of family farms. Our vision has several strands. First, we believe in a living countryside and recognise the need to keep rural communities intact. The countryside should not be allowed to decay or to be turned into a museum or indeed a theme park. Secondly, like everyone else, we want to see a working countryside where jobs are available and residents are not forced to commute or move to the towns. A strong vibrant economy needs the contribution that rural areas can make.

Thirdly, we recognise that town and country are one nation with close relations between the two. Many who live in rural areas work in towns, while those who live in towns rely on the countryside for relaxation and leisure. We want to strengthen those relations. Fourthly, we want to enhance the environment. We want a countryside in which we care for the range of plants and animals and in which the landscape is properly protected and conserved. It is vital for the quality of life of those who live and work there, and equally of those who relax there.

Finally, we intend to promote a rural White Paper. We do care. We have already given help to bus services. We want to see a countryside which is alive. Having said all that to noble Lords and having expressed the concern of the Government for the countryside, I should like to finish by thanking all speakers who have participated this evening. It has been a good debate and one which I welcome. I can assure all noble Lords who took part that I shall ensure that all the views expressed are passed to Ministers, especially my right honourable friend the Minister in the other place.

House adjourned at eleven minutes past ten o'clock.